Subprime auto finance securitizations are being watched even more than usual nowadays.

Late on Friday, S&P Global Ratings adjusted its ratings of securitizations provided by Lendbuzz and Southern Auto Finance Co. (SAFCO).

According to a news release, S&P Global Ratings placed its ratings on 11 classes from Lendbuzz Securitization Trust (LBZZ) 2024-1, 2024-2, 2024-3, 2025-1, and 2025-2 and four classes from SAFCO Auto Receivables Trust (SAFCO) 2025-1’s automobile receivables-backed notes on CreditWatch with negative implications.

“Today’s CreditWatch placements reflect a particular subset of subprime auto loan backed ABS transactions where many of the underlying obligors include immigrants, and who might not be legal U.S. residents or citizens,” S&P Global Ratings said in the news release.

“Given the composition of the pools of obligors and the cumulative effect of immigration law enforcement actions, we are reassessing our projections for future losses, our loss-timing forecast, and other assumptions underlying our current credit ratings,” analysts continued.

In August of last year, SAFCO used research from the Consumer Financial Protection Bureau to craft and deploy its rebranding initiative to expand credit access for all consumers, regardless of their credit history.

And earlier this month, Lendbuzz announced that it filed a registration statement on Form S-1 with the U.S. Securities and Exchange Commission relating to the proposed initial public offering of its common stock.

S&P Global Ratings added that the CreditWatch placements connected with Lendbuzz and SAFCO follow a CreditWatch action relating to First Help Funding, “which operates in the same niche submarket as Lendbuzz and SAFCO.”

S&P Global Ratings said 11 ratings from three FHF Issuer Trust transactions (series 2024-2, 2024-3, and 2025-1) were placed on CreditWatch with negative implications on Sept. 9 “due to transaction performance that is trending worse than our initial expectations.”

S&P Global Ratings went on to say, “We will continue to monitor the transactions’ performance and will look to resolve the CreditWatch placements after we have completed our reassessment.”